“We want to increase sales by 20%.”
“We need more people to register for the program.”
“We need greater participation in this initiative.”
“We need this campaign to generate more leads.”
These all sound like marketing goals.
But there is a question that should come before anyone starts talking about social media, advertising, videos, email campaigns, or creative concepts:
What will that result reasonably cost?
Marketing and money are often discussed in separate conversations. Leadership establishes the goal. Someone approves a marketing budget. Then the marketing team or agency gets asked to make the two work together -
this is backward.
A marketing budget should be related to what you are asking marketing to accomplish.
Start With the Outcome, Not the Tactics
Say a business generates $1 million annually and wants to increase sales by 20%.
That means the real target is $200,000 in new revenue. Now we have something we can work with.
If the average customer generates $5,000, the business needs about 40 additional customers.
But where will those 40 customers come from?
If only one out of every five qualified prospects becomes a customer, the business doesn't need 40 prospects. It needs about 200.
And reaching those 200 qualified prospects isn't free.
Now we are having a much better marketing conversation.
We can begin asking what it costs to acquire a customer, what each customer is worth, how well the sales process converts prospects, and how much the business can afford to spend while still making the growth worthwhile.
That is very different from saying:
“We have $10,000. What kind of campaign can you give us?”
This is for Public Agencies Too
This isn't only a private-sector issue.
Suppose a public agency needs 1,500 people to participate in a new program.
Or a nonprofit needs 500 registrations for an event.
Or a funded community initiative needs completed applications from a specific population.
Those outcomes have costs attached to them too.
If an organization spends $30,000 and generates 1,000 completed registrations, that works out to $30 per registration. Is $30 good? Maybe.
That answer depends on what a completed registration is worth to the organization, what comparable efforts have produced, and what happens after someone registers.
That is the conversation leadership should be having.
Not simply: “How many people saw our campaign?”
Reach matters. Engagement matters. Clicks matter. But none of those numbers should stand alone.
Sometimes the Budget Is the Problem
Let's be honest, this is the part people don't always want to hear.
Sometimes the marketing isn't failing. The expectation is unrealistic.
An organization might set an aggressive outcome and then assign a budget with little chance of achieving it.
You cannot ask for a Cadillac outcome on a bicycle budget. And no amount of clever copy is going to fix the math.
A responsible marketing strategist should be willing to tell you that before you spend the money.
Maybe the goal needs to change. Maybe the budget needs to change. The audience needs to be more focused. Maybe the sales process is losing too many qualified prospects. Maybe people are responding to the campaign but encountering a terrible registration process.
Maybe marketing isn't the problem at all.
Finding that out before spending another dollar is valuable.
Marketing Needs a Seat at the Financial Table
Marketing professionals love marketing metrics.
Impressions. Clicks. Engagement. Followers. Website traffic. Leads. Those numbers tell us something, but they don't always tell leadership what it needs to know.
A mayor, executive director, department head, CEO, program director, or board member eventually has to answer a different question: “What did we get for the money?” That doesn't mean every result must produce revenue.
Public agencies aren't businesses. Nonprofits don't exist to generate sales.
But money is still being spent. There is still an objective. And there should be a reasonable connection between the two.
- If your organization spent $50,000 to increase enrollment, what happened?
- If you invested $25,000 to promote a community program, how many people participated?
- If you spent $100,000 to generate new business, how much business resulted?
Those are not questions marketing should avoid. We should welcome them.
Stop Starting with the Budget
One of the most common questions in marketing is:
"What is your budget?”
It is a necessary question, but I don't think it should always be the first.
I would rather know:
- What are you trying to accomplish?
- How much of that outcome do you need?
- What is that outcome worth to your organization?
- What has it historically cost you to produce it?
Then we can have an informed conversation about money.
If you tell me you have $20,000 before we understand the objective, all I know is that you have $20,000I. I
don't yet know whether $20,000 is too much, too little, or about right.
Better Marketing Starts With Better Questions
Marketing is a business function. It affects revenue, expenses, public participation, customer acquisition, program enrollment, fundraising, reputation, and other organizational outcomes.
We should treat it that way.
Before deciding that you need a campaign, another social media platform, more advertising, a new video, or a bigger content calendar, ask:
- What are we actually trying to make happen?
Then ask:
- What should it reasonably cost us to make that happen?
Those two questions won't give you all the answers. But they can keep you from spending a lot of money answering the wrong question.
That is where I believe smarter marketing starts.
